Compared to ordinary memories, dream memories still have something mysterious about them and invite interpretation. The aim of this study was the simple but fundamental question whether this (perceived, presumed) emotional–mental specificity of dream memories is associated with something specific at the level of brain physiology. Subjects were n = 30 healthy volunteers, aged 21–62 years, who had experienced a significant high-intensity dream or had repeatedly experienced such a dream. Using event-related functional magnetic resonance imaging (fMRI) and a recognition memory paradigm, we investigated the neural correlates of recognition of “dream words” compared to “story words.” Thirty dream words that best represented the dream were extracted during a qualitative dream interview with intensive dream reliving. Thirty story words were learned through self-directed effort from a written short story. These items, along with 60 additional distractor words from the dictionary, were randomly presented on the scanner in an old/new decision task. When dream words were statistically contrasted with story words in terms of their blood-oxygen-level-dependent effects, the difference was significant (p < .001, effect size dz = 1.2). By superimposing the mean contrast image on a reference brain, we were able to localize the specificity of dream activation in the medial orbitofrontal cortex/medial prefrontal cortex, a central part of the default mode network. The results suggest that dream memories are differentially processed in these areas. A novel experimental design was demonstrated that allows precise control of dream stimuli for future functional magnetic resonance imaging studies.